Like the OP said, it will force their citizen to understand how it works. One can speculate that the average Salvadorian will understand more about Bitcoin than the average HN reader.
Nope, lots of people here are just like me: proud salty nocoiners.
We poor old salty nocoiners can only wipe our flowing tears with the 100$ rags from our fat wallets. Oh poor us, we foolishly put our wealth into cashflow producing assets. Oh the sorrow every quarter as the dividends are deposited in our flash-loan-hack-proof bank accounts.
Thats a weird thing to brag about - if talking about past returns there's few 'cash flow producing assets' that'd have done as well as just putting the money in btc.
Also flash loans don't take anything out of your wallet/account either and I know of people whose bank accounts have been hacked.
There's plenty to complain about btc but you've somehow chosen the least convincing argument for why you are a noncoiner.
No, this was the GP's point. Many of those "salty nocoiners" are invested in assets that produce reliable cash flow, which is considerably safer than holding a purely speculative asset like crypto.
Victims of bank fraud mostly receive their money back by the bank.
This one recent example of an crypto exchange that fled with the money, has defrauded more in value than the entire ACH payment system worth ~51T ( fraud = 0,0008 % = 0,08 basis points).
That's not completely true. I left it at ~18 k. A couple of years ago as i didn't saw a path to become profitable. I suppose a lot of HN'ers joined early on and left by now.
My stocks are doing good enough for me to not care at all about crypto since then. Even if that wouldn't be the case, I wouldn't invest in something that I don't think has a viable path.
Eg. The current solutions are using off-chain centralized transactions to fix core things ( eg. transaction fee).
What happens is that many on HN were around in 2009-2011 when it first appeared and was cheap. Everyone who didn't buy in then has a vested interest in it failing because then they feel like they didn't miss out and that their decision not to get involved was validated.
It is becoming apparent as time goes by that there are very many of them here. I seem to have attracted some that downvote every comment I make.
I owned Bitcoin back in 2012-2014 when i thought it was going to be an actual currency to exchange goods and services. Since then, it has become a tool for speculation and an ecological disaster, both of which are strongly opposed to my ethos.
I now own precisely 0€ worth of Bitcoin and strongly recommend all my friends never to fall into that kind of trap. Because capitalism and speculation ruins lives, whether you trade stocks or magic BTC numbers.
And yet here you are on hackernews, owned and run by ycombinator, an organisation that exists to capitalise on both of these things, with the aim of making a small group of investors and founders very very rich.
> Are you aware of the cognitive dissonance in your position?
I am more than aware of my position and my surroundings. But i don't feel any dissonance, though i do feel a lot of ethical/ideological conflict in these forums (which i'm happy to take part in on occasion).
For reference I also got involved in a similar period and used it successfully to transact business with people in foreign countries at a much lower cost than via bank transactions.
Yes bitcoin has pivoted now to a store of wealth or even a cheap way to move large sums and it is less efficient for smaller transactions, but lightning network solves this problem sufficiently.
Again pivoting is not something unique to bitcoin and many tech firms have pivoted to find their niche. Being able to react and respond is a feature not a bug.
No, I am having a discussion with someone and trying to understand someone else's position on something on which we are opposed. Is that wrong? Or are you just anti-bitcoin/cryptocurrencies and have come to argue with me and are picking up something without bothering to read the whole context of the comment chain?
Are you in the US? If so do you have a 401k for retirement? That is capitalism and speculation and trading stocks. If you don't what is your retirement plan?
I am not a huge fan of capitalism, but here I am living in a world where it exists and I have to survive in it, it's. It going to change before I retire so I need to invest in the stock market via a retirement/pension fund. Of course I could choose not to do that but the only cost there is a negative one for me, it won't change the system.
I don't exactly have one, because i'm also from the global north (france). I'm betting that before i get to "retire" (i'm not a employee so there's not really a such thing for me) either climate change will collapse the capitalist economy (let's enjoy clear water before industry has used it all) or government will have turned fully fascist and put the rest of us (anarchists, muslims, homosexuals/trans*) in concentration camp...
> it won't change the system
Do what you need to do. But keep in mind together we're strong enough to change it. Changing the system (which can only happen through a global revolution) is the only thing that matters to give new generations a chance to live a better life than the shitty one we had... and to escape all dystopian scenarios that are slowly coming to life.
Bring me another option and I'm there in the revolution with you friend. Sitting idly by is not my thing at all, bitcoin was a start to upsetting the existing system but it was never going to do it on its own.
So sign me up for the revolution mailing list but let's get some content.
I have had a chance to read the article now. I still have some BTC and I have made money from it. I am not looking to make any money back, I can never make a loss. Same for all the people I advised to get into it in 2011/2013.
I am also fortunate and with enough self-awareness to understand that the economy that I operate in is not the same for everyone all over the world. I understand what being un-banked means, I understand the extra costs that come with being poor. I understand that remittances from developed nation to developing nation are a lifeline for many many families. I understand that the traditional ways of sending money to these destinations involve fees as high as 20% or more and doesnt always include the ability to immediately access those funds at the other end. I know that there are unscrupulous Western Union branches/employees that will charge further fees at the receiving end. So whilst it is nice to have a high horse to sit upon, perhaps you could use that perspective to understand that not everyone is in the same position as you. Where you see waste someone else sees financial access, where you see speculation others see utility.
You don't plan for the future because you forsee the downfall of society, so through choice you elect not to plan. Others don't plan for the future because they cant plan further than a week or 2 weeks ahead because the subsist and survive on a day to day basis.
It may be a gross generalization but based on the majority of comments on HN, it is unfortunately an accurate one.
Not only are the comments salty, they are generally ill-informed.
See Dang’s recent call to HN for more insightful comments and less vitriol for example.
It hurts me to say this about HN because on other topics comments are often deeply insightful but when it comes to Bitcoin (and other cryptos) HN comments are often ignorant and dismissive.
Yeah, pro-coiners probably fail to realize, if they've put their money in it, that means they've bought the hype. And people don't like to believe they're stupid, but since they also have a confirmation bias, they also look for proof that they're right, and all the stories from random websites saying "Crypto is the future!" remain in their minds, while all the skeptical articles, they just say "Pah, another luddite!" and dismiss.
Blockchain tech is unrelated to bitcoins/crypto's.
Just like Stackoverflow doesn't correlate with the value of the .Net framework or HN doesn't correlate with the value of the ARC programming language ( since it's build on that tech)
It's an example of the tech, but the value of blockchain does not have a correlation with any of the 8000 implementations as crypto.
Additionally, the implementation of El Salvador uses Lightning network and since that obfuscates transactions off-chain to a centralized authority. It's not what i'd call blockchain anymore.
Yes and no. The latter is built from the former. But the former is ensured to build wasteful tech. I explain the difference between consensus and gossip in an article about decentralized forging, if you're interested:
A blockchain is a way to reach a decentralized consensus, but the devil lies in the details. Who gets to take part in this consensus? On what criteria? Most blockchains are vulnerable to 51% attacks, rendering them quasi-useless to actually distribute trust.
Consensus can also be achieved by trusting a 3rd party in a certain context. Funny that's precisely what BTC people are doing with their exchanges, with Lightning, and even with Bitmain & Cie owning the majority of the network.
Also, you should know historically the luddites were artisans who destroyed the machines (introduced by the bosses) that ruined their lives and work conditions. They were not loonies opposed to any form of technological progress. In that sense, maybe some of us from HN are in fact luddites, because we want the machine to help, not to ruin society and the environment.
I think el-salvador is going down this path because their current path doesn't work. So instead, they are trying another monetary theory.
Short term profits might come, not from money laundering, but from bitcoin whales that are true believers and decide to come live there. Some of those whales might have gotten their bitcoin illegally, and are happy to avoid a fiat off-ramp. I suppose that might be money-laundering in some sense.
The core problem about this is that they don't have money.
My statement about money laundering is their attempt to fix it partially. But Bitcoin by itselve won't fix their core issue.
Another one is is connectivity ( to make faster payments and not take the bus), bitcoin won't fix that either.
They are pushing internet access to help Bitcoin, but it creates a false dogma. Since Bitcoin was not the answer, it was internet access for all to make faster payments.
I don't think blockchains are particularly well suited for solving El Salvador's actual problems, like gang violence.
There's a not entirely implausible theory that says Bukele is going for Bitcoin specifically because El Salvador uses the US dollar and is thus prevented from taking the typical path of printing more its own currency to "solve" problems. With Tether and various dodgy custom apps in the mix, they can now print money.
Printing money in bitcoin requires some really weird stuff to happen. Essentially, either you need to scam others with Tether, or you need your apps to literally lie to their users.
Bitcoin was made to be deflationary. That means it was made not to allow anyone to print money. It would have made more sense for them to pick ethereum if they wanted the ability to print money.
Really, the only thing I can imagine is using colored coins in bitcoin, or switching to some other currency later.
If you look through the technical details this proposal, it 100% allows for money printing.
El Salvador isn't actually giving people Bitcoin. It's giving people records in an SQL database that supposedly correspond to Bitcoin in a government wallet.
The government can just edit that SQL database to print money.
Trickle down works for immigration. Immigration is not even close to zero sum. For wealth re-distribution within a country it starts of zero sum. And indeed, putting all the wealth concentrated does not help the poor.
Making the wealthy wealthier without taking from the poor will help the poor some. Moreover, it will help the government a lot more.
A small developing country with little industry, high inequality and some of the worst murder rates in world decides to spend their very limited money and attention on populist nonsense like this.
Transaction fees is one thing, but going to the city by bus to pick up the money is extra cost and hours of time. I sometimes wish people from US would travel to these places to understand the life other people were born into.
I have traveled extensively in developing countries (years) and see this cryptocurrency initiative serving a real need with remittances and electronic payments.
I'm not overly familiar with M-Pesa. That said, a primary distinction is centralized vs decentralized. I prefer to have full control and trust in my currency. Crypto is volatile, but there also isn't a central bank to inflate away its value. From my perspective that is the totality of the value from distributed / decentralized consensus in currencies
So you're saying you "see this cryptocurrency initiative serving a real need with remittances and electronic payments" and also you're not "overly familiar" with the market leader in remittances and electronic payments?
The leader you reference is not dominant in all or even most developing countries. You likely have never even had a need to use an app like this. I can only conclude your comments are in bad faith.
Wait, lightning network is really cheap for moving money on existing channels, but channel openings still need to happen on-chain right?
That would still mean one transaction per citizen to open their lightning channel. Or, at least, one output.
This is what I was wondering. If such a thing existed as an El Salvador based VPN, would using that to download the wallet be enough to secure you your 30USD worth of Bitcoin?
And what about people within El Salvador downloading it to multiple devices from different IP addresses?
I'm sure this has been considered and there's more to it than just...
1: download wallet
2: Profit!
...as all the press reports I've seen seem to be suggesting.
The current bitcoin transaction fee is about $7, so nobody is going to be using this for everyday transactions, making $30 not much of an incentive. It sounds like there will be the option of choosing to accept cash instead, so it will be interesting to see how many prefer $30 of real, spendable cash over $23 of virtual, difficult to spend tokens.
Edit: Perhaps I was a bit glib as using the lightning network will probably solve the transaction fee issue. This could become an partially isolated transactional network, with less common transactions into or out of the network, like some SMS-based transactional networks in other parts of the world. In those cases uptake was quick as it was so easy to use (you only needed an SMS enabled phone). I am truly curious about how this turns out.
As far as I know you have to be on the internet at least once in 30 days, so it's good only for hot wallets. Also for payments over $1k probably right now Bitcoin transaction is more practical (I have heard of $100k lightning transactions though).
There are risks, you need to remain online to catch your counter-party cheating.
There are ways to outsource this to so-called watchtowers. This can generally be done privately, and the watchtowers generally get to take at least some of the cheater's money.
I haven't heard of any successful malicious channel theft. I have read quite a few stories of people losing local data making it much harder to recover the money in the channel.
You can route through your pair. Say A has a channel with B, B has a channel with C and C has a channel with D, you can make payment between A and D provided that B and C are online. In a way that nobody can steal money from one another, and neither B not D know who is paying who.
In practice, B and C would probably be like banks or exchanges, with many channels, while normal users only need one channel open.
The lightning channel would go through a custodial wallet. Yes, people could self host their own wallets, but fees would be higher because they'd have to open a lightning channel.
This doesn't seem factually accurate. Please support this claim with more information and preferably a citation. This isn't how LN works to my knowledge.
What I said is factually accurate. It's mentioned on the homepage of the lightning network website in the "How it Works" section. Why would you challenge my statement when you haven't even read the basic information?
Because you left out some information. These channels only have to be opened once, and at current prices this is around 40 cents. It costs a lot more to both open a bank account and send money from a -> b.
If you need to open up 6 million channels it will create approximately a month worth of transactions at the current rate and will significantly push up the transaction fee.
It will definitely use lightning, and 99% chance it will be a custodial version no different in actual execution to venmo or paypal, as this is exactly what the present solution du jour there has been (strike in custodial mode) specifically to address the underlying fact that without such a config, lightning doesn't really work. (routability of payments scaling based on size sucks, inbound transfers suck, you need to run your own full node which most regular end users are flatly not going to do)
In terms of that obviously negating any of the original promises of cryptocurrency in terms of censorship resistance, financial sovereignty, be your own bank, audit the state of the ledger upon which everybody is actively transacting, etc, yes, of course, that's the entire point of the hijack and sabotage of BTC.
While tx fees are pretty volatile, I see about 3$ (65 sats/vB) to get into the next block (even looking back to when you wrote this) and <1$ if you’re ok with waiting an hour or so.
I don't understand how you arrive at this seven dollar figure. Right now a median fee is 3-4 satoshi's per byte resulting in a typical transaction cost of about $0.64 usd. Here is a site that shows the live fee spread: https://jochen-hoenicke.de/queue/#BTC%20(default%20mempool),...
if you send them all as a single transaction i.e one transaction with 6 million outputs, you would pay 1 transaction fee. However I dont think that is what is happening here. All the transactions are likely to made on the lightning network, which is a layer on top of bitcoin, designed to facilitate smaller transactions with lower fees.
Before you post a comment about Bitcoin fees, please take a little time and try out lightning. It's come an incredibly long way, it's very fast, and very cheap, and very easy using a mobile wallet.
You can restore from a backup surely? Unlike losing a physical wallet, which in most cases, means losing the cash it holds at least, but possibly getting things like your ID returned. If you lose your mobile, you will likely never have it returned, but any funds or accounts you have on it can be reinstalled on a new mobile.
The key is just a bunch of words which one need to write down with pen and paper and store in a safe place nobody can access.
One can imagine better schemes of course, to hide or share the secrets.
It seems like many here don't get what I think they're doing: government buys 180 million USD worth of Bitcoin, stores it in their wallet, and creates an SQL database (well, with a bank as a wrapper) with 6 million entries with $30 (or whatever that is in BTC) each.
The transactions can just be recorded in this SQL database, and the "reserve" would be untouched. If someone wants to exchange their BTC to USD or Euro, they can go to a money changer, their SQL database entry will be decreased, the money changer's SQL database entry will be incremented, and the total BTC in the reserve remains.
Hmm, I think I just described the so-called Lightning Network, which means in the end you have to trust a central authority after all. (EDIT: After reading about LN, it seems this isn't how the Lightning Network works).
They might as well make something like "El-Salvador-Coin" without needing dumb blockchain stuff.
Interesting. So what they are actually building, is a Bitcoin reserve for a central digital currency, replacing USD, SDR, or gold reserves. The trick here is that it is a one-way accumulator. Bitcoin comes into the reserve but never leaves. The initial money may come from existing USD reserves, or it may be undercapitalized fiat Bitcoin.
Every currency has a value theory. USD has military hegemony and financial market centralization. China has exports and foreign land holdings. CHF is backed by gold. The Euro is trying to become a regional 3rd world reserve through remittances. Labor-based currency has been tried, but, you probably don’t want to know about it.
It would be interesting if this is indeed the case. With the government not giving salvadorians custodial wallets. That also explains the idea lower down this thread [1]. That stated this might be done so the government can print their own money.
With the SQL database, that would be quite easy. With actual bitcoin wallets (or the lightning network) essentially not doable.
As you pointed out, this isn't how Lightning Network works. The fact this is being upvoted is useful information about the state of this site and people's knee-jerk reaction to anything cryptocurrency related (coming from someone who has been here a while)
114 comments
[ 4.7 ms ] story [ 201 ms ] threadI don't see another reason to go down this path...
We poor old salty nocoiners can only wipe our flowing tears with the 100$ rags from our fat wallets. Oh poor us, we foolishly put our wealth into cashflow producing assets. Oh the sorrow every quarter as the dividends are deposited in our flash-loan-hack-proof bank accounts.
Also flash loans don't take anything out of your wallet/account either and I know of people whose bank accounts have been hacked.
There's plenty to complain about btc but you've somehow chosen the least convincing argument for why you are a noncoiner.
This one recent example of an crypto exchange that fled with the money, has defrauded more in value than the entire ACH payment system worth ~51T ( fraud = 0,0008 % = 0,08 basis points).
https://www.engadget.com/africrypt-bitcoin-disappearance-174... https://silamoney.com/ach/understanding-the-basics-of-ach-fr...
My stocks are doing good enough for me to not care at all about crypto since then. Even if that wouldn't be the case, I wouldn't invest in something that I don't think has a viable path.
Eg. The current solutions are using off-chain centralized transactions to fix core things ( eg. transaction fee).
It is becoming apparent as time goes by that there are very many of them here. I seem to have attracted some that downvote every comment I make.
I now own precisely 0€ worth of Bitcoin and strongly recommend all my friends never to fall into that kind of trap. Because capitalism and speculation ruins lives, whether you trade stocks or magic BTC numbers.
I'm not alone: https://drewdevault.com/2021/04/26/Cryptocurrency-is-a-disas...
And yet here you are on hackernews, owned and run by ycombinator, an organisation that exists to capitalise on both of these things, with the aim of making a small group of investors and founders very very rich.
https://www.ycombinator.com/topcompanies/
Are you aware of the cognitive dissonance in your position?
I am more than aware of my position and my surroundings. But i don't feel any dissonance, though i do feel a lot of ethical/ideological conflict in these forums (which i'm happy to take part in on occasion).
Yes bitcoin has pivoted now to a store of wealth or even a cheap way to move large sums and it is less efficient for smaller transactions, but lightning network solves this problem sufficiently.
Again pivoting is not something unique to bitcoin and many tech firms have pivoted to find their niche. Being able to react and respond is a feature not a bug.
https://thenib.com/mister-gotcha/
I am not a huge fan of capitalism, but here I am living in a world where it exists and I have to survive in it, it's. It going to change before I retire so I need to invest in the stock market via a retirement/pension fund. Of course I could choose not to do that but the only cost there is a negative one for me, it won't change the system.
I don't exactly have one, because i'm also from the global north (france). I'm betting that before i get to "retire" (i'm not a employee so there's not really a such thing for me) either climate change will collapse the capitalist economy (let's enjoy clear water before industry has used it all) or government will have turned fully fascist and put the rest of us (anarchists, muslims, homosexuals/trans*) in concentration camp...
> it won't change the system
Do what you need to do. But keep in mind together we're strong enough to change it. Changing the system (which can only happen through a global revolution) is the only thing that matters to give new generations a chance to live a better life than the shitty one we had... and to escape all dystopian scenarios that are slowly coming to life.
So sign me up for the revolution mailing list but let's get some content.
I am also fortunate and with enough self-awareness to understand that the economy that I operate in is not the same for everyone all over the world. I understand what being un-banked means, I understand the extra costs that come with being poor. I understand that remittances from developed nation to developing nation are a lifeline for many many families. I understand that the traditional ways of sending money to these destinations involve fees as high as 20% or more and doesnt always include the ability to immediately access those funds at the other end. I know that there are unscrupulous Western Union branches/employees that will charge further fees at the receiving end. So whilst it is nice to have a high horse to sit upon, perhaps you could use that perspective to understand that not everyone is in the same position as you. Where you see waste someone else sees financial access, where you see speculation others see utility.
You don't plan for the future because you forsee the downfall of society, so through choice you elect not to plan. Others don't plan for the future because they cant plan further than a week or 2 weeks ahead because the subsist and survive on a day to day basis.
Not only are the comments salty, they are generally ill-informed.
See Dang’s recent call to HN for more insightful comments and less vitriol for example.
It hurts me to say this about HN because on other topics comments are often deeply insightful but when it comes to Bitcoin (and other cryptos) HN comments are often ignorant and dismissive.
Blockchain tech is unrelated to bitcoins/crypto's.
Just like Stackoverflow doesn't correlate with the value of the .Net framework or HN doesn't correlate with the value of the ARC programming language ( since it's build on that tech)
It's an example of the tech, but the value of blockchain does not have a correlation with any of the 8000 implementations as crypto.
Additionally, the implementation of El Salvador uses Lightning network and since that obfuscates transactions off-chain to a centralized authority. It's not what i'd call blockchain anymore.
Yes and no. The latter is built from the former. But the former is ensured to build wasteful tech. I explain the difference between consensus and gossip in an article about decentralized forging, if you're interested:
https://staticadventures.netlib.re/blog/decentralized-forge/
Eg. With the lightning network
Consensus can also be achieved by trusting a 3rd party in a certain context. Funny that's precisely what BTC people are doing with their exchanges, with Lightning, and even with Bitmain & Cie owning the majority of the network.
Also, you should know historically the luddites were artisans who destroyed the machines (introduced by the bosses) that ruined their lives and work conditions. They were not loonies opposed to any form of technological progress. In that sense, maybe some of us from HN are in fact luddites, because we want the machine to help, not to ruin society and the environment.
Short term profits might come, not from money laundering, but from bitcoin whales that are true believers and decide to come live there. Some of those whales might have gotten their bitcoin illegally, and are happy to avoid a fiat off-ramp. I suppose that might be money-laundering in some sense.
My statement about money laundering is their attempt to fix it partially. But Bitcoin by itselve won't fix their core issue.
Another one is is connectivity ( to make faster payments and not take the bus), bitcoin won't fix that either.
They are pushing internet access to help Bitcoin, but it creates a false dogma. Since Bitcoin was not the answer, it was internet access for all to make faster payments.
PS. Africa has payments by text, this could have worked there too without Bitcoin: https://onereach.ai/what-the-u-s-can-learn-from-mobile-payme...
There's a not entirely implausible theory that says Bukele is going for Bitcoin specifically because El Salvador uses the US dollar and is thus prevented from taking the typical path of printing more its own currency to "solve" problems. With Tether and various dodgy custom apps in the mix, they can now print money.
https://foreignpolicy.com/2021/06/15/el-salvador-bitcoin-off...
Bitcoin was made to be deflationary. That means it was made not to allow anyone to print money. It would have made more sense for them to pick ethereum if they wanted the ability to print money.
Really, the only thing I can imagine is using colored coins in bitcoin, or switching to some other currency later.
El Salvador isn't actually giving people Bitcoin. It's giving people records in an SQL database that supposedly correspond to Bitcoin in a government wallet.
The government can just edit that SQL database to print money.
I don't understand. How are you supposed to make money from wealth hoarders? The trickle-down fairy?
Making the wealthy wealthier without taking from the poor will help the poor some. Moreover, it will help the government a lot more.
Proof/evidence for that statement?
I guess the gangs will appreciate it?
Presently very high transaction fees and poor banking-system support eats up a significant amount of this wealth.
Can you see why this isn't "populist none-sense" ?
And what about people within El Salvador downloading it to multiple devices from different IP addresses?
I'm sure this has been considered and there's more to it than just...
1: download wallet 2: Profit!
...as all the press reports I've seen seem to be suggesting.
Edit: Perhaps I was a bit glib as using the lightning network will probably solve the transaction fee issue. This could become an partially isolated transactional network, with less common transactions into or out of the network, like some SMS-based transactional networks in other parts of the world. In those cases uptake was quick as it was so easy to use (you only needed an SMS enabled phone). I am truly curious about how this turns out.
https://www.coindesk.com/strike-launches-bitcoin-lightning-p...
I haven't heard of any successful malicious channel theft. I have read quite a few stories of people losing local data making it much harder to recover the money in the channel.
However, the first transaction between a specific pair (channel opening) still needs to occur on-chain. That transaction still pays a full fee.
But every citizen would still need atleast one lightning channel. And opening those is expensive.
https://lightning.network/
In terms of that obviously negating any of the original promises of cryptocurrency in terms of censorship resistance, financial sovereignty, be your own bank, audit the state of the ledger upon which everybody is actively transacting, etc, yes, of course, that's the entire point of the hijack and sabotage of BTC.
How?
The transactions can just be recorded in this SQL database, and the "reserve" would be untouched. If someone wants to exchange their BTC to USD or Euro, they can go to a money changer, their SQL database entry will be decreased, the money changer's SQL database entry will be incremented, and the total BTC in the reserve remains.
Hmm, I think I just described the so-called Lightning Network, which means in the end you have to trust a central authority after all. (EDIT: After reading about LN, it seems this isn't how the Lightning Network works).
They might as well make something like "El-Salvador-Coin" without needing dumb blockchain stuff.
Every currency has a value theory. USD has military hegemony and financial market centralization. China has exports and foreign land holdings. CHF is backed by gold. The Euro is trying to become a regional 3rd world reserve through remittances. Labor-based currency has been tried, but, you probably don’t want to know about it.
With the SQL database, that would be quite easy. With actual bitcoin wallets (or the lightning network) essentially not doable.
[1] https://news.ycombinator.com/item?id=27628739
p.s. for people wondering what LN is, it is essentially:
Pairs of people agree to split some locked up bitcoin a certain way.
If they want to exchange bitcoin, they agree on a different split.
If someone tries to cheat, Hashed Time-locked contracts (the crypt magic that makes this work) means you get to take all of the locked up bitcoin".
Assuming all other aspects are solved.
The primary value of cryptocurrency is there not being a central authority to inflate away its value (through bailouts or economic 'stimulus').
Smart contracts offer the same fundamental value: you know what you are getting into and no one authority can change the terms on you.